Choosing a Broker

As you might expect, in today's economy, both sellers and their real estate brokers are very eager to make deals. A buyer should always be aware that the seller’s broker represents only the seller and has a fiduciary duty (that is, a duty of trust) to the seller and not the buyer. Buyers, therefore, should never rely on oral representations made by the seller's broker as to the physical or financial condition of the apartment or the building. Alternatively, brokers can also represent only the buyer, and at least theoretically, have a duty of trust only to the buyer. Even though the buyer is represented by his or her own broker, the commission is paid by the seller.

The Process Begins

Although many people still comb the real estate section of the Times on Sunday, new technologies dominate the process. The Internet is the starting point for most folks looking for an apartment. It’s through that process, that buyers meet brokers and apartments get “shown”. There is no true multiple listing of apartments in Manhattan, but the inventory available can be known after spending a few days reviewing the listings of the big brokers and the smaller firms. The Internet dominates the process.

After the Offer is Accepted

Once an offer is accepted, the attorneys will go about the business of negotiating the contract and completing due diligence. Once the contract is signed, the brokers will play a major role in getting the buyer “approved” by the Board. The extensive purchase application package requires financial disclosure and references and a number of other goodies. The buyer’s broker will assist the buyer with putting the “package” together, so that it has the right tone for the particular co-op or condo. There is no question that there is a skill to Board packages and many brokers are quite good at putting the buyer in the best possible light. Unfortunately, that is not always the case. When the buyer does not have a broker, and the buyer is relying solely on the seller’s broker, the willingness to assist with the Board package may not be as great as with a buyer’s broker. In other cases, the broker is sloppy, uninterested or just plain out to lunch. How the Board package looks when it goes to the managing agent can save a lot of time and can make a huge difference in how the Board perceives the potential purchaser.

Know Who You're Dealing With

Like everything else in life, getting references before you select a broker is extremely important. There are many knowledgeable and experienced brokers out there, who are a pleasure to work with. On the other hand, there are other brokers that should be avoided at all costs. Some vampires feed on money, not blood, so keep some garlic handy.

Residential Reality

I can't emphasize enough how competitive the New York market is among brokers. Considering that New York is still recovering from the nose dive of 2008, there is a heightened urgency to get the deals done that are slowly coming into the pipeline. Make sure you know who you're dealing with or at least know someone who does.

A co-op owner asks: I have found that maintenance is usually higher in coops than in condos because of the contribution by the shareholders to the building's underlying mortgage payments. In condos, the unit owners only pay for real estate taxes and common charges for common areas. Will the monthly maintenance be reduced after the underlying mortgage has been fully amortized?

We just submitted the Board package and we realize that we neglected to disclose a lawsuit against my husband’s company, in which my husband is named as a defendant? The lawsuit is covered by insurance and my husband is indemnified from liability by his employer. Should we notify the managing agent and amend the purchase application?

We are negotiating the contract and we just found out that there is a substantial assessment that will go into effect the month that we close on the purchase. Should the assessment be deducted from the purchase price at closing?

I am buying an apartment in a small building and I just found out that the elevator is being renovated and will be out of service for three months. Do I have to close if the elevators will not be operational on the closing date?

My husband and I own a co-op and we would like to transfer the shares to an irrevocable trust that we recently created for estate planning purposes. Will our cooperative allow us to make that transfer?

My boyfriend and I are interested in buying our first apartment in a new construction condominium. Our mortgage broker tells us we should qualify for a 90% loan, but it will be a close call for the bank. The sponsor wants us to sign a “no contingency” contract. Is that a good idea?

We are considering a condo purchase in a new development that is only 25 percent sold. There is a bank that has approved the project and will make the loan, but should we be concerned about the number of units that the sponsor still has to sell?

We are buying an apartment that has been extensively renovated. Among other things, the size of the master bath was significantly increased. Can we rely on a representation in the contract that all required approvals were obtained from both the Cooperative Corporation and from the New York City Department of Buildings?

We received a draft of the contract of sale for the cooperative apartment we are buying and our social security numbers are on the front page! Our attorney told us that we will have to provide our identification numbers to the managing agent for a credit check as a part of the Board package, so it’s not a big deal. Do we have to list our socials on the contract?

I am considering an apartment in a new construction condominium. There is park under development by New York City that will greatly enhance the value of the condominium when it’s completed. Although the sponsor’s salesperson indicated that the first phase of the park will be completed in the next year or so, the Offering Plan contains a “Special Risk” that states that the sponsor gives no assurance as to when, if ever, the park will be completed. Who and what should I believe?

We are in negotiations to purchase a co-op apartment on the Upper East Side. Our lawyer reviewed the minutes and discovered that the building has a bedbug infestation. Should we go forward with our purchase?

At my closing, I had to reimburse the Seller for his New York State “STAR” rebate that appeared on the maintenance statement for the month following the Closing. What exactly is the STAR rebate and will I be able to obtain the rebate as well?

I just found out that the seller will be unable to close for an additional two weeks. As a result, I will have to extend my rate lock, at a cost of $1,200.00. Is the seller obligated to reimburse this cost?

We are selling our apartment to our neighbor, but our neighbor can’t afford to purchase our apartment unless she sells her apartment. Her lawyer wants the contract to provide that the purchase of our apartment is contingent upon the sale of her apartment. Our lawyer is advising us against including a provision that makes the transaction contingent on the sale of the buyer’s apartment. Should we go along with the contingency?

We are selling our co-op and the buyer is not obtaining a mortgage in connection with the purchase. The contract required the Board package to be submitted within 10 business days after the fully-executed contract was returned to the buyer. The buyer is two weeks late in submitting the package. Is the buyer in default?

I’m selling my condo and I have not been able to pay my common charges for the past six months (I lost my job). I have a buyer for the apartment, but the Board of Managers will not release the Waiver of the Right of First Refusal, unless I pay the outstanding balance of the common charges. I’m between a rock and a hard place, as I don’t have the money. What should I do?

I am combining two adjacent apartments that I own and I want the co-op to issue one stock certificate for both apartments. There is an outstanding UCC lien against one of the apartments. The other apartment is owned free of any liens. Can the co-op object to the combination?

My attorney asked me to contact the managing agent to verify the maintenance and assessment information that's disclosed in the contract for the apartment I intend to purchase. Isn't that my attorney's job?

Our application to purchase a co-op was turned down by the Board without an interview. Although our attorney asked the managing agent to disclose the reasons for the Board’s decision, none were given. Can the Board just turn our application down without any explanation?

I am buying a co-op in Manhattan. The managing agent is located in Brooklyn and refuses to send a closing representative to the attorney’s office for the buyer or seller located in Manhattan. Will everyone have to go to Brooklyn for the closing?

We are purchasing a condo that was occupied by a tenant at the time the contract was executed. We just did the walk through and there is damage to a portion of the floor that was hidden by the tenant’s furniture. Are we entitled to a repair credit at Closing?

A loan commitment was issued, but the bank requested an explanation for a $14.00 missed credit card payment that occurred nine years ago. Could the bank withdraw its commitment as a result of this missed payment?

A leaking pipe inside the wall of my co-op was recently replaced. The following month, my maintenance account was charged $1,000.00 on the theory that the pipe only serviced my apartment. Am I responsible for this repair?

We submitted our Board package a month ago, but the Board has not scheduled an interview or asked for any additional information. To make matters worse, the managing agent won’t give us any indication as to what’s going on. Is there anything we can do?